COLUMBUS — A state appeals court on Thursday unanimously found that Gov. Mike DeWine did not have the authority to remove teachers pension board member and investment expert Wade Steen in mid-term and ordered his reinstatement.
The board of the State Teachers Retirement System of Ohio was meeting just a few blocks away, so Mr. Steen immediately walked over and entered a behind-closed-doors executive session that was under way with the second man appointed to replace him, Brian Perera.
When that meeting ended, Mr. Perera was gone, and Mr. Steen took his seat at the regular meeting.
But it was unclear whether the state will appeal the ruling. The four-year term to which Mr. Steen was appointed expires on Sept. 27.
“The statute unambiguously requires that the two investment expert members of the STRS board ‘be appointed for four-year terms,’” Judge Kristin Boggs wrote for the 10th District Court of Appeals in Columbus. “Based on that plain statutory language, we agree with the magistrate’s conclusion that, unless appointing a midterm replacement to fill a vacancy in the office, ‘the governor had no power to make an appointment of an investment expert member to the board for a term of either less than or more than four years.’”
In fact, the panel went further than the magistrate in determining that state law denies the governor such authority.
Mr. Perera, an Upper Arlington consultant and former state legislative budget expert, never returned to the regular meeting. A paper nameplate fashioned by a retired teacher replaced the official nameplate of Mr.Perera at the members’ desk.
The court overruled Mr. Perera’s objections to the magistrate’s conclusions and granted summary judgment in Mr. Steen’s favor. It issued a writ “ousting Perera from the office of the governor’s appointed investment expert member of the STRS board and reinstating Steen to that office, to which he has established a clear legal right.”
STRS is the second-largest public employee pension fund in Ohio and among the largest in the nation, with $91 billion in assets and nearly 540,000 active, inactive, and retired members as of June 30.
Mr. Steen insisted on again taking his oath of office to erase any suggestion his votes would be invalid.
“I’ve waited a year,” he said. “You can wait five minutes...It’s just to be doubly sure that I’m legitimately a member of this board. I was illegally removed. I have been returned today, This is just a precautionary measure.”
Soon after that oath, the board’s chairman, Dale Price, abruptly adjourned the meeting, putting an end to the rest of the meeting agenda. That agenda would have included discussion about future performance bonuses for in-house investment staff. A group of retired teachers has objected to such bonuses in the past.
It also blocked a likely attempt to remove Mr. Price as chairman. Judging by the preliminary votes surrounding Mr. Steen’s oath that were decided 6-4, it appeared that the power dynamic on the board has shifted in the reformers’ favor with Mr. Steen’s reinstatement.
Mr. Price and board members on the other side of the power dynamic left the room without talking to reporters.
Mr. Steen, a certified public accountant, was first appointed to the board in 2016 by then Gov. John Kasich and was reappointed by Mr. DeWine in 2020. But the governor recalled him last year with more than a year left in his second term amid a power struggle on the board in which Mr. Steen had allied himself with some retired teachers demanding reforms.
At the time, the governor had objected to Mr. Steen’s meeting attendance record.
These retirees have objected to how the board has invested its portfolio, challenged the performance bonuses, and demanded restoration of once annual cost-of-living adjustments in retiree benefits.
At first, Mr. DeWine replaced Mr. Steen with G. Brent Bishop, a Columbus business consultant and, at the time, a University of Toledo trustee. But a 10th District magistrate opined that the governor didn’t have the authority to remove Mr. Steen. Mr. Bishop later resigned, and Mr. DeWine replaced him with Mr. Perera.
However, the all-Democrat, three-judge panel has now agreed with the court magistrate’s opinion that there never was a vacancy in the first place to which anyone could have been appointed.
Mr. Steen’s Toledo attorney, Norman Abood, said board members initially balked at Mr. Steen’s return during the executive session, noting they had yet to read the just-issued decision.
“I said it’s effective immediately,” he said. “It’s an effective, enforceable order until it’s reversed by some other court, and the failure to follow it will be considered contempt of court.”
Chris DeMarco, of Stow, an executive board member of the Ohio Retirement for Teachers Association, said during a break in the meeting that the broken promise of annual cost-of-living raises has hurt retirees, particularly when inflation has spiked in recent years. He said the current board seems to have tried drive a wedge between retired teachers collecting benefits and the active members still putting part of their paychecks into the system.
“We have a mutual interest,” he said. “We’re just at a later stage in the continuum. Sometimes when you’re an active teacher, you’re young, you’re healthy, and you’re raising a family, you’re not thinking about 30, 35 years down the road. But it comes up, and it comes up quickly, and it becomes a real issue. “
By Jim ProvanceApril 18, 2024
These photos were taken upon Wade Steen's return today to his seat on the STRS Ohio Rertirement Board.
